In recruitment, to coin an old hunting maxim, you eat what you kill. Salaries are based heavily on commission, with low base rates putting the pressure on performance. With sales volumes dropping managers are left in a difficult position; consultants face shrinking and morale-busting pay packets when they most need motivating.

Increasing commission or base salaries across the board is out of the question in today’s business climate. Pushing up the cost of sales at a point when recruitment agencies are facing fee pressure and cashflow constraints is not viable.

And, as Ron Burke, European head of sales reward and motivation at HR consultants Towers Perrin, succinctly puts it: “In the good times you would never decrease your commission and they would be yelling and screaming at you if you did.”

So, since business is down and people aren’t earning as much money, what can be done to reposition rewards and motivation packages to boost business?

One tactic is to add a higher band of commission. High billers have the greatest impact on the bottom line — not just because of the level of sales, but because the fixed overheads, such as base salary are better capitalised upon. This means the cost of these sales is lower and the company can afford to increase the reward without a significant impact to the bottom line.

The tactic also provides a welcome psychological boost and improves retention of the top performers. Sunil Duggal, managing director of Just IT Recruitment, told Recruiter the company introduced a higher commission bracket, paying consultants 25% commission when they bill over £30k in a quarter.

Duggal says it pushes consultants who have had a successful month to continue for the rest of the quarter, hoping they can reach the higher percentage band. Analysing the length of time over which commission is calculated and paid can help ensure that consultants’ focus is the most effective for the company. Mark Cameron, chief operating officer of international recruiter Astbury Marsden, told Recruiter the company had introduced a quarterly scheme, in addition to its traditional annual payouts.

“We tweaked the original scheme, the thresholds and returns on those, and then overlaid a scheme with a shorter time frame. Given that there was the immediate requirement to make fees, we wanted to reward people who did that successfully quarter to quarter.”

A scaled-down annual scheme was retained to ensure consultants maintained a long-term focus on their sales pipelines combined with the new quarterly scheme, says Cameron.

Duggal has also adjusted the time frame of commission payments, moving from monthly to quarterly remunerations to ensure reward was closely aligned with performance. “We had a problem with consultants who will bill nothing one month and the next they would bill £20k, which would shove them into the higher percentage bracket,” he says.

The widespread restructuring which is taking place in the staffing sector has led to a certain amount of natural attrition. Consultants who joined in better times have been leaving under pressure from sales targets.

However, relying on the sales force evolving through performance targets, with weaker players dropping out as the sales environment becomes harsher, is a bad idea. Poor performers incur costs and damage client relationships.

Burke said the notion of self regulation through commission schemes with low base salaries and high commission was poorly placed: “It’s not necessarily a good way to run the business. The low performers can drag on and incur all kinds of other costs before they decide to leave the business.”

Scott Cullen, sales effectiveness and compensation consultant at HR consultancy firm Watson Wyatt, told Recruiter: “You want to make sure you are targeting the right clients and concentrating on sectors which are growing,” and additional bonuses can be added to encourage consultants to target particular types of clients.

However, there is no need to increase commission to target sectors which are aligned with the company’s growth plan. Often existing staff can move desk, benefiting from greater sales opportunities and providing a larger contribution to the bottom line. Russell Clements, chief executive of IT recruiter SThree, advocated this approach during a forum hosted by recruitment trade body the Association of Professional Staffing Companies (APSCo). He also recommended moving top accounts to high performers who could then increase penetration and profits for the company.

Running sales competitions can also provide a costeffective method of boosting sales team morale and shaping the type of sales consultants are achieving. “If you don’t have them these could be a very effective method for very minimal additional cost, compared to adding another compensation component,” says Burke, adding if you already have them in place it’s essential to retain them.

Duggal says Just IT Recruitment has increased the number of competitions it runs, whilst scaling back spend. The reaction was positive, with the new targets fostering “a fighting in the trenches” atmosphere among the ranks of the sales force.

Unlike commission, competitions can also be staggered across the recruitment process, motivating consultants across the full range of sales-based activities.

“They can stagger the points between getting interviews, making placements and whether the placements stay three months. It’s a sliding scale,” says Helen Hanspal, corporate sales director at gift company Red Letter Days.

Duggal has structured one of the company’s competition using this method, introducing a ‘Drink, Eat, Travel’ scheme where consultants move from a glass of wine to bottles of champagne, and free travel to work to holidays.

There is also room to reward staff through competitions which cater to the competitive instincts of high-billers.

James Joyce, head of marketing at IT recruiter NetworkersMSB, has taken the group’s top 30 performers on a VIP all-expenses paid trip to Las Vegas. The competition aims to provide the top 10% of the company’s 300-strong staff, who all bill more than £100k per month, with a trip they couldn’t “plan or pay for”. “We have limos picking us up laden with champagne to take us to our suites at the Bellagio [Hotel],” says Joyce.

The resultant scramble to get on the leader boards towards the end of the competition provided a significant boost to business, according to Joyce, who says the company also runs a series of UK-based events. Whether consultants are flown to Las Vegas or given champagne, taking a fresh look at rewards and motivation is essential in motivating the workforce and ensuring agencies are capitalising on consultants. And managers need to keep in touch with staff throughout the planning process.

Pauline Redpath, director of technical, finance and HR recruiter Source People, told Recruiter taking time to talk to her team and finding out how they are being affected has been crucial to structuring a programme. Times have changed in the staffing sector since last year and it has had a direct effect on consultants’ pay packets. The dangers of disillusioned employees further weakening a company’s performance are paramount, and reward and motivation need to be thoroughly analysed.

In most recruitment agencies, consultants work for reward — it’s part of the reason people are attracted to the industry. Now the market has changed gear, the tools of delivering these bonuses need to be assessed. “Motivation is key — the sales force are the guardians of the top line of the organisation so they need to be performing for firms to survive the downturn. That strategy is reflected in the sales compensation plan,” says Cullen.